On Monday, November 9th, 2015, the U.S. Supreme Court heard oral arguments in an important case regarding outstanding medical bills for a man injured in an auto accident. At issue is whether or not the injured man has to pay back his insurance company for his medical bills, even after his lawsuit has settled. Our team of auto accident attorneys details this case and its potentially far-reaching implications.
The case, Montanile v. National Elevator Industry Health Benefit Plan, was filed by Robert Montanile, who was hurt in a crashed caused by a drunk driver. His medical bills amounted to $121,000, which his own health insurance plan, National Elevator Industry Health Benefit Plan, paid in full.
Montanile also hired a personal injury attorney to help him recover damages from the drunk driver. He filed sued against the driver, ultimately securing a $500,000 settlement. Once his case settled Montanileâs insurance company requested to be reimbursed for the $121,000 it paid for his medical expenses, which the man refused. After several months of discussions, Montanileâs lawyer released to him the $121,000 (that was being held in a trust), which Montanile spent.
Meanwhile, the benefit plan sued Montanile for the full amount of his medical expenses under whatâs often called the âmost complicated statue in the entire U.S. Code,â the Employee Retirement and Income Security Act of 1974, or ERISA.
ERISA and Equitable Relief
ERISA is a meticulous statute that details a wide range of lawsuit remedies. It sets the minimum standards for pension plans in private industry and guarantees payment of certain benefits, among other things. ERISA does not state, however, that an insurance plan can get damages from one of its members even if the member signed a contract promising to reimburse the company.
Turns out Montanile had already spent the money he recovered in his injury lawsuit. The benefit plan sought a legal remedy called "equitable relief," which is a special type of court system that adjusts common laws in unique circumstances to come to a fair agreement. In other words, equitable relief was the only avenue the benefit plan had to get its money back, since under strict law, it was not entitled to Montanileâs settlement.
Traditionally, equitable relief only allows parties to demand restoration of a specific object or particular amount of money in the other partiesâ possession or control. Under ERISA, this is called âappropriate equitable relief.â Since Montanile already spent the money he recovered, it is now up to the Supreme Court justices to decide what exactly "appropriate equitable relief" means in this case.
The benefit plan argues that the money was in Montanile's possession when it started trying to get it, which should be enough to demand restoration. Montanile argues that, because the money is not in his possession, the benefit plan cannot request the exact amount, only “some amount,” which is not permissible under equitable relief.
The conservative Supreme Court justices disapprove of the fact that Montanile's personal injury lawyer released the $121,000 fund to him in the first place, and tend to rule in favor of the insurance industry. They are undoubtedly concerned that if they rule in favor of Montanile, other personal injury clients will follow this pattern in attempt to avoid reimbursing insurers.
Conversely, a decision in favor of the insurance company would mean a broad interpretation of "appropriate equitable relief," which could empower lower courts to interpret it however they see fit. Conservative justices also disapprove of loose interpretations of federal law and any attempts to work around the rules. They might find it worth ruling in favor of Montanile in order to preserve federal law and how it is applied throughout the country.
The auto accident attorneys at Pintas & Mullins Law Firm will watch this case closely and post a follow-up on this blog when a ruling is made. If you or anyone you love was seriously injured in a car, truck or motorcycle accident, contact our firm immediately for a free legal consultation. We accept clients nationwide.